Property sales in Tehran made strong gains in the second month of the Persian year (April 21-May 20), moving up 16.7% y/y, the Central Bank of Iran (CBI) said on May 28.
The surge in property sales in Iran’s capital comes as Iranians look to stave off any further losses caused by the plight of the Iranian rial (IRR), down more than 50% in value on the black market over the past six months in the face of economic jitters triggered by hostility and impending heavy sanctions from the Donald Trump administration. Property has always been seen as a safer bet in uncertain times in Iran. However, people presently searching the market for a deal are typically confronted by requests for extra money given the average per square metre price of property is rising.
As prices increase amid rising demand, Tehran developers often try to make units more affordable by cramming small apartments into a building. Where one might expect to find a plan for five apartments, they frequently apply for a building permit for 10 units.
In total, 19,100 residential units changed hands during the one-month period. The previous month saw fewer transactions because people were only gradually arriving back from the two-week Nowruz new year holiday. The month on month property sales jump was thus unsurprisingly as big as 278.7%.
New homes most popular
New home sales (the data groups properties less than five years-old) accounted for the most significant share of sales in the second month, with some 8,392 units sold, which was equivalent to 43.9% of all properties sold. In second place were units of 6-10 years-old. Sales in that category stood at 3,147, equating to a 16.5% of market share.
Properties listed as 11-15 years-old were the subject of 2,814 property sales (14.6 % share), while those 16-20 and 20 or more years-old generated 2,791 (14.6%) and 1,963 (10.3%) sales, respectively.
Residential units with a ground floor area of less than 80 sqm accounted for 55.6% of transactions. The largest share of transactions involved units with a size of 60 to 70 sqm.
Tehran’s newer western suburbs see the bulk of transactions due to property availability and lower prices overall. The western District 22, largely made up of large residential tower blocks, and District 5 are seeing clear sales growth. They accounted for 12.8% of sales on the property market during the second month (Ordibehesht, the second month of the spring season), the highest share of any other defined location.
Mountain-hugging, wealthy neighbourhood of District 1
The most expensive area of Tehran remains the mountain-hugging, wealthy neighbourhood of District 1. Its official average per sqm price is IRR125.4mn. North-westerly District 2 is second at IRR97,517 per metre. The cheapest area is District 22, with an official average sales price of IRR57,344 per sqm. However, many Tehranis do not trust the official figures, pointing out that the central bank does not actually set the prices and that 'out there in the real world' unofficial prices prove substantially higher as developers ask for what they like.
Also, according to the latest Tehran rental data, rental rates increased 11% m/m and 9.6% y/y in Ordibehesht.